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Series LLCs: Advanced Planning and Tax Implications

Advantages and Disadvantages, Existing IRS Guidance, Tax Pitfalls, and Alternative Structures

Recording of a 90-minute premium CLE/CPE webinar with Q&A

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Conducted on Thursday, February 1, 2018

Recorded event now available

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This CLE/CPE course will provide counsel and tax professionals an instructive review of recent trends in using series LLCs. The panel will compare the advantages and disadvantages, discuss federal tax implications of tax reform, analyze existing IRS guidance and examine tax pitfalls and alternatives.

Description

A series LLC is an emerging choice of business structure, popular for a variety of business and planning uses. Series LLCs are used for real estate investment, asset protection, as well as in business arrangements such as hedge funds, oil and gas deals, and fractional shares.

The use of series LLCs requires practitioners to understand the tax aspects and pitfalls associated with these entities. The IRS has provided guidance over the years in response to complaints of uncertain tax treatment and a number of states have inconsistent legislation, leading to the development of the Uniform Protected Series Act (the Act).

There are some questions that remain as the Act makes it way to the states for consideration. Among the challenges for counsel are state treatment of series LLCs, employment tax and benefits, bankruptcy, and asset protection. Counsel must be able to recommend alternative business structures for situations where the series LLC is not the appropriate choice.

Listen as our panel discusses the advantages and disadvantages of series LLCs, federal tax implications, and critical tax and legal pitfalls to be considered when contemplating the use of this entity structure.

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Outline

  1. Series business organization law
    1. Overview of state law inconsistencies
    2. Potential uses of Delaware series LLCs
    3. Potential legal risks in using Delaware series LLCs
      1. Liability risks in non-series states
      2. Federal bankruptcy risks
      3. Charging order issues
      4. Miscellaneous risks
  2. Case studies: hypothetical Delaware series LLCs
  3. Tax treatment of series LLCs
    1. Federal tax treatment
      1. IRS regulations
      2. Check-the-box framework
      3. Employment tax and employee benefits
      4. Series LLCs under the new Tax Reform
    2. State tax treatment of series LLCs
      1. Overview of state tax treatment
      2. State tax treatment in California and other jurisdictions that have issued regulations on taxation of series LLCs
  4. Traps for the unwary in the proposed Centralized Partnership Audit Regulations

Benefits

The panel will review these and other key issues:

  • What are the business and legal advantages of selecting a series LLC business entity form?
  • What are the IRS regulations concerning tax treatment of series LLCs and what issues remain?
  • What are the potential state law issues that arise when a business operating as a series LLC conducts business in a state that does not recognize or has not adopted the form?
  • What are the alternatives to forming a series LLC?
  • What opportunities are available for series LLCs under the new Tax Reform?
  • What issues arise from the proposed Centralized Partnership Audit Regulations?

Faculty

Mandarino, Joseph
Joseph C. Mandarino
Partner
Smith Gambrell & Russell

Mandarino is a Partner in the Tax Practice of Smith, Gambrell & Russell, LLP.  His practice focuses on...  |  Read More

Sparkman, Allen
Allen Sparkman
Partner
Sparkman & Foote

Mr. Sparkman practices in the areas of business, tax, securities, professional responsibility, and philanthropic...  |  Read More

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Strafford will process CLE credit for one person on each recording. CPE credit is not available on recordings. All formats include course handouts.

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